CTIA released its 2006 numbers at the show. Some of them don’t add up. For e.g. they noted 233M subs by end of 2006 however their ticker is showing 234M as of March 07. One of them is clearly incorrect. Secondly, they noted that data service revenue was $15.2B. Again, the top 4 operators published numbers added up to $14.4B, rest of the industry (with over 43M subs) generally generates over 10% which takes the numbers to $15.8B which we had earlier reported.

An executive at a prominent mobile operator recently asked me – is there any money in Mobile Search? Should we just get Yahoo or Google in here and not worry about it? Is there something at stake here that we should worry about? Mobile Search is a dilemma to many in the value chain. Should they cede control or innovate for the long-term? As the discoverable content increases in depth and breadth, it is inevitable that mobile search will drive user navigation on devices. Whether it is by user keying in a few keywords or short cuts or search engine generating a personalized, to-the-minute user interface that directs user navigation, mobile search strategies will start taking center-stage on majority of decks. Also, advertisers are starting to discover the power of mobile channel to connect with the consumers.

A key problem for the mobile data industry is subscribers trying to find a specific piece of content or a specific application. All of the major operators offer an excellent and expansive range of games, ring tones and many other applications. While choice is great for the consumer, if they can find what they are looking for, the sheer number of options available is bewildering. It is impossible to browse and navigate the labyrinth navigation structures available today. Mobile search helps tie together otherwise silo?d catalogs and deep navigation trees for ringtones, graphics, games, music, sports, news and other content.

There are several differences between Internet (aka Google) search and mobile search. While Google on desktop might return a useless list of 2M hits (the useful results are generally in the first dozen links), mobile search needs to take in more variables before it figures out the “answer” to the user input. These variables are driven by context, history, preferences, device capabilities, and social network. You weir off a bit and the experience starts to waffle. Understanding “user?s intent” is key. The business models are also slightly different. While Google might present the paid-search-results on top, on the side or even blended in the main body, search results needs to very optimized and customized to the query and context. In addition, several new models come into play like “click-to-call” where real money is to be made. Some calls such as in real-estate business can yield over $30 per call for referrals. You can do the math. Clearly, we are in the early experimentation phase and some of the high CPMs and CPCs will eventually settle on a more reasonable metrics, but the need and demand is there.The majority of the searches initially will happen via browser and using keypad input from the user but will gradually be integrated tightly across applications and platforms and will accept voice, image, bar code, and others input mechanisms.

Mobile ‘Long Tail’

We are all used to a hit driven games and ringtones business that is constrained by the limits of deck or storefront menus and by shelf space. Mobile Search helps eliminate the need to market and arrange the storefronts for the lowest common denominator and instead foster up hundreds of niche categories and storefronts. A successful long tail model in mobile will be driven by two core requirements:

Easy access to all of the content in the category being sold. But also must have access to the hits in the category.

Easy ways for content buyers to find the rare stuff in niches. Menus on menus on menus linked from the home page won?t cut it on a small screen. You can?t display it all.

Blended results

Most mobile keyword searches will involve answers that come from multiple sources and databases. In such cases, search results are „blended? or federated and results collected amongst numerous databases. These databases are all generated by mobile-centric crawlers or filtered from web-centric real-time API feeds or content integration into a catalog.

Search modality

Initially, majority of the searches on the device will happen via a browser. However, in the next few years, search application(s) will be embedded in majority of the devices and will become a standard feature just like SMS or IM clients on the devices today. Other means of input to search would be voice, picture (camera) or bar code (camera, barcode reader). Results from searches could be cached and potential content of interest can be pushed to the user device for quick access. At the end – users really do not care about modality, they care about relevancy.

Finding content from anywhere

Mobile search solution should empower user with flexibility and on-demand capability. If the user is using a desktop, they should be able to send results or customized queries to not only their phones but also to all parties of interest. Similarly, user might be in a car and the situation demands a voice input and text out capability. User should be able to find relevant information by speaking some key words instead of tapping them in.

Running promotions

The search results page can provide an area for carrier driven promotions. The subscriber?s search term determines which promotion is presented. The process of creating a promotion and tagging it with relevant keywords is performed in the content management system. After being published, retrieval and presentation of a promotion is an automated background process. To stem declining ARPU and grow revenue, one needs to make it easier for consumers to find what interests them by delivering “relevance on top”.

Local search

Local search is an important part of mobile search offering. Often times, people are looking for people, places, and events around them. The capability to seamlessly look up local information based on position location and present the results sorted by context, community ratings, and user preferences is essential. The ability for local advertisers to tap into this new promotion medium provides an opportunity for 1-to-1 marketing.

Mobile Advertising

Advertising also takes a new dimension with mobile. The wealth of user information and the capability to have 1-to-1 relationship with the user makes it a very powerful platform for the multi-billion dollar advertising industry. They get the user demographic information along with the confirmation of a “view” which is gold for advertisers. Having said that, a few missteps can also alienate users for months.

Coming back to the questions we posed early on, in the short-term, the revenues will be generated by finding sellable goods on the device. There is ample evidence in current incarnation of mobile search deployments that just be making the findability simpler, there is at least 5-10% boost in revenue. If you can build recommendations on top of that, your revenues will increase further, then if you link your silos to cross-promote and cross-sell, another few percentage uptick is experienced. Just mining the existing store will pay off the mobile search investments within weeks, not months. Then extending the search universe to off-deck and the Internet will help user expand their choices which again benefits the eco-system. Then, promotions, advertisements, quad-play, social-networks, user-generated content, .. you get the picture. We are just starting to scratch the surface. And yes, the industry benefits from the tension between operators, OEMs, media giants, and Internet behemoths. In the end, mobile search will help drive quality of content, personalization, and better user experience.

On the heels of the Tellme acquisition, Voicesignal is jumping into the mobile search arena with voice search with VSearch. From their press release:

How VSearch Works
VSearch is the world’s first voice driven mobile search service that allows consumers to find information and mobile content by speaking a search term into the VSearch handset application. Leveraging the familiar directory enquiry format, users can find any local business by stating the location and either the name or category keyword into the phone. The system sends the processed audio information to the VSearch server via the mobile data network where the user’s query is converted into text by the VSearch speech recognition engine. This unique combination offers the highest accuracy and reliability in all environments for the consumer. The requested listings—along with relevant, interactive advertisements supplied by Third Screen Media—are sent to the device and displayed on the screen. The user can review the information, place a call to the business, and get a map of its location and more.

Clearly, there is tremendous activity in the mobile search and advertising arena and I hope to capture and report on the same from CTIA. I can smell the acquisitions coming.

We will have our own “very exciting” announcement (in this space) to make in a few days. Stay tuned.

John Battelle presents a proposal for MS and Yahoo to take on Google. It is nothing new, has been presented before but it illustrates the desperation at Yahoo and MS at the widening gap between them and the Search master. Actually, Steve Flinn posted the comments which are more in line with what’s going to happen

However, at first blush, as a shareholder I would oppose it for two major reasons:

1) Every general wants to fight the last war again, and search is the last war as far as I’m concerned. Personalization is the upcoming war — that’s clearly where Google is heading across all its apps, not just search. And that means that’s not only where advertising is heading, but computing in general. Search will always be important, but recommendations and application level personalization will likely become even more important. I don’t see personalization getting ceded to a JV — it’s too strategic for both Microsoft and Yahoo (and I think Microsoft holds the stronger cards of the two in this area — but Google is clearly the player to beat)

I agree. The online search war is over. Google won. The next battle ground is in “personalization” and “mobile” and how you tie the online and mobile world together. Google hasn’t exactly wowed users with its simplistic offerings in the mobile arena. Their subscriber base is in low millions and presents an opportunity for both Microsoft and Yahoo to build some lead and momentum. They are striking deals with operators that weren’t possible before - yes, they are willing to do white-label deals. Google is also coming around and leaving its arrogance at the door to offer some compromises. In mobile, at least for short-term, it is a distribution and reach game. Mobile Enterprise Search is also an untapped territory for search players and MS is better positioned. MS has done a poor job of leveraging its resources and relationships to come up with a coherent strategy, but the motivation to beat Google keeps them up at night. Interesting battle to watch for the coming months and years.

Looking forward to CTIA in a couple of weeks. Always good see friends, colleagues, and the new stuff. Parties are not bad either. Hope to see some of you there. I will be shuttling between Billboard and Mobile Advertising session on Monday and then T-Thu at CTIA. Let me know if you would like to meet one of these days.

Let me know if you would like me to cover any particular company, sub-segment, new entrants, etc. Our CTIA report will shortly after the event.

Microsoft close to acquiring Tellme for close to billion dollars. it is an acknowledgement that MS’s voice strategy hasn’t worked inspite of BillG’s push for the last 10 years. Industry veterans would note that MS hated VoiceXML and pushed its on SALT initiative which didn’t make much progress. Tellme is 100% VoiceXML (Jeff and I wrote the first book on VoiceXML 2.0 back in the days) and standards-based operation. The acquisition is both driven by its lack of progress as well as fear of Google acquiring Tellme to get a leg up in voice/mobile search.

–What is the potential of the mobile search market? Independent consultant Chetan Sharma has some insightful excerpts on his blog. In a nutshell, he estimates desktop search outpaces mobile search by a ratio of 3:1. But the revenue potential of the mobile search market in the U.S. alone is set to reach $2.5 billion in 2010, up from just $100 million in 2007

For people fortunate enough to understand and follow Cricket - the sporting feast started today with opening ceremony in the Caribbeans. For the next 45 days, the world will be treated with the ups and downs of the world cup - an event that comes every 4 years. Fortunately for us, we will be able to follow the event in daylight and wouldn’t have to stay awake into the wee hours. WSJ (Tunku Varadarajan) did a good roundup.

You can follow live coverage on Dish network or on willow.tv for $199 for the whole competition.

Vonage has been ordered to pay Verizon US$58 million plus 5.5% per line in monthly royalties to Verizon for infringing on three patents relating to VoIP services, the Virginia Eastern District Court has ruled. The jury found five patents (from an original seven) to be valid but found the claim (rather than the patents) on two patents relating to billing, account management, and fraud minimization to be invalid. The jury also found that the infringement was not wilful, which would have tripled the award-maximum liability would have been in the region of US$197 million and 19% royalties claimed by Verizon.

The patents infringed cover call translation from the Internet to the PSTN, call waiting features, and Wireless VoIP handsets. Vonage also stated that it will immediately file an appeal and has argued that Verizon was not actively pursuing utilization of the patents until competitors such as Vonage came to market. Verizon has countered that it was unable to do so because of regulations in place at the time.

This is definitely a big blow to Vonage which is already struggling. Though the decision is going to be appealed, things don’t look good for this VoIP company.

This article was first published in Dec 2005 by WSA Newsbytes and is being republished in Wireless World Magazine’s March 2007 issue. The new article quotes Stacy Wolff, Director, Mobile Design, HP Personal Systems Group

A great design is timeless… From our perspective “form is function” … “Technology used to sell on speeds and features, now we sell and buy product on appearance, emotion, personal value. In other words lifestyles drive product. The technology future is both blurred and fused by our lifestyle. There is no single colour trend nor is there a single color emerging. We see silver metallics continuing with warm silver metallic’s emerging and gaining strength. We also see black as the “neutral colour” of choice that when correctly executed exudes luxury. We see texture on different levels. We see “form” in general moving toward an organic form (softer), but with great control and simplicity. Soft or organic forms are balanced with elements of precision.”

It’s the User Experience, Stupid!

Chetan Sharma, Sarla Sharma

The US wireless industry added more subscribers in 2005 than any other year in its two-and-a-half decade old history. Thanks to messaging and interest in digital media content, wireless data revenues from first six months in 2005 were over $4B while it had taken the entire year in 2004 to amass the same amount[1].

This year started with a flurry of activities in the wireless industry. From mega-acquisitions of AT&T Wireless and Nextel to the launch of new data networks[2] and services, the wireless market has been quite active. However, in spite of the buzz, carriers, especially in the US, face the same old problem of improving industry’s most fundamental metric - the average revenue per user (ARPU)[3].

As we move towards an all-IP world, voice ARPU is declining and there is a danger that data ARPU might not increase fast enough to offset this fall off. By focusing on enhancing the user experience, digital media content and applications can be made compelling enough to boost interest, usage and distribution –- and hence revenues. Wireless carriers who implement a user-centric vision will deliver sustainable competitive advantage and will help define the next-generation of personalized services.

We need to remember that the principle motivation to buy is not the technology, but the service that the customer is willing to accept and pay for. As such, all in the value chain need to focus on the single most important aspect of any service - consistent and immersive user experience.

Current applications and infrastructure framework do not do a good job of usability. At best, they are device-centric, i.e. content is customized by group of devices. Little attention is given to making the browsing and purchasing of content quick. By making content more push-centric, bandwidth can be optimized and increase value to the consumer. In addition, location and context should be used to package the digital content elements before they are presented or pushed to the user.

Help users find information

The digital media catalog across ringtones, ringbacks, graphics, movies, music, TV shows, video clips, etc. is growing at an explosive rate. Finding something that might interest you is becoming an incredible challenge. Consumers go through enormous pain to find the media content that they like. Imagine the up-take rate if users were able to find the content quickly and items that they are likely to appreciate are pushed up to them rather than subjecting the user through an archaic menu-like navigation system. A voice navigation system and recommendation engine backed by an analytic framework will help enable such search and discovery functionality. By building a content database of meta-data associated with all content, several opportunities will open up. Mobile search will be more important and cross-selling/up-selling opportunities will finally open. This content data along with user’s history, preferences, and context will make for a very useful user experience that will increase data usage and hence ARPU.

Focus on day-to-day application use

Carriers should focus on making the everyday use applications – address book, calendar, SMS – better. For example, current calendar implementations do not have sharing and auto-syncing functionality. If Jan inserts an entry “Pick up kids at 4:00pm from Soccer practice” and if Jan and her husband Steve share the calendar, Steve’s calendar should be updated automatically with this new entry. Additionally, these applications need to be ubiquitously accessible and multimodal in nature to adapt to the users’ needs. These features will offer an attractive way of retaining customers in addition to creating potential new revenue streams.

Embrace new models

To be successful, carriers need to focus on new models such as off-net digital content sales, mobile advertising, superdistribution, and machine-to-machine. The implication is that services must be designed to enable new models and user experiences, and let independent content providers access the market without dealing with the walled gardens. Such a possibility requires the scope of the UI to be broader than existing implementations. It also requires the UI to be dynamic, i.e. to have the ability to be modified on the fly. However, some of these new models will only be successful if user privacy is fully respected.

Conclusion

As the networks are becoming capable of delivering higher bandwidths, devices are coming out with ARM9+ processors and rich multimedia capability, and digital content is becoming more pervasive – we are at the cusp of a hockey stick growth. However, digital multimedia content will only proliferate if user experience is front and center of every offering and every interaction that user has with the device and all types of content. It needs to be contextualized and personalized based on user’s needs, preferences, and device capabilities. Only then can the true potential of digital media be unleashed.

Chetan is an industry expert and author of numerous books, articles, and reports on wireless industry. He is advisor to CEOs and CTOs of leading wireless companies on product strategy and IP development. More information at www.chetansharma.com. Sarlais a Principal with the firm and her experience includes work with Fortune 500 companies in various industries. Her clients include T-Mobile, AT&T Wireless, Clearwire, Alltel, Microsoft, aQuantive, Getty Images, and Costco

Yesterday, MS Research showed of new research. One of the items was - snap a picture of a nearby building, send off the photo to a database and soon you’ll get back a map and information about where you are.

The map-search technology required Microsoft to get millions of street-level pictures of Seattle’s buildings and landmarks. Those pictures were added to a database and indexed by distinguishing features that can be cross referenced to pictures sent in by users.

My question is WHY?

Most phones have GPS (granted GSM phones in US are out of luck for most part but they will be enabled soon). Doing this picture database thing is too expensive and cumbersome (if you want to make this service universally available) .. for some landmarks, it works fine and might be preferable in the short-term (given the confusion regarding the business model) but long-term, NO.